Japan, U.S. report progress toward trade talks

Japan, U.S. report progress toward trade talks

Japan will not have to pledge in advance to reduce its massive tariffs on rice or other agricultural products to join free-trade talks with the United States and 10 other nations, potentially smoothing over one major political barrier to Japan’s participation in the negotiations, U. S. and Japanese officials said Friday.

The statement followed a meeting between President Obama and Japanese Prime Minister Shinzo Abe, and in one sense restated the obvious: Tariff levels on agricultural products are part of the negotiations, and no country would be expected to make particular commitments up front.

But the context of the statement, coming after a high-level summit between the two leaders, added weight to the idea that Abe is edging toward a decision to join the Trans-Pacific Partnership (TPP) as part of his larger effort to revive Japan’s stalled economy.

Abe, who just took office last year, faces important parliamentary elections in the summer. Japan’s farmers are a powerful lobby, and rice farmers – protected by an estimated 700 percent tariff on imports – are a particularly potent cultural and political force.

But the TPP talks are progressing toward possible completion this fall, and the longer Japan is absent from the negotiating rounds the more difficult it would be to catch up with the work that has been done. All nations involved in the talks – which includes several that already have free-trade agreements with the United States, such as Australia, Canada and Mexico – would have to agree to admit Japan to the treaty. Other participants, such as Vietnam and Malaysia, are partners that would help the United States expand its presence in Asia.

“The two Governments confirm that should Japan participate in the TPP negotiations, all goods would be subject to negotiation,” the statement said – an important signal that Japan has accepted the basic aim that the TPP talks be as expansive as possible. But the statement notes that “as the final outcome will be determined during the negotiations, it is not required to make a prior commitment to unilaterally eliminate all tariffs upon joining the TPP negotiations.”

The two sides also reported progress on U. S. complaints over the difficult market for U. S. autos in Japan and rules that favor the giant Japan Post financial conglomerate – topics where the United States does hope to secure commitments before letting Japan join the trade discussions.

The TPP is one of the administration’s centerpiece economic initiatives, and U. S. officials hope the addition of Japan, Korea and others will allow it to shape modern trade rules for much of the world economy. If Japan does not join the talks ahead of time, it could become part of the trade zone later if the other members agree.